First came the AI ‘teammates’, then the layoffs: the new reality for Atlassian staff now looking for work
Sacked from his “dream job” at software giant Atlassian, Rubio* wants just one thing – closure,“We were probably exceeding expectations and there’s no explanation from the company as a whole as to why any of this happened,” he says,“The only desire that I have, outside of receiving my severance package, is closure as to why I was selected,”On Thursday morning last week, Atlassian laid off 1,600 workers – about 10% of its total workforce,Nearly 500 Australian staff were among them.
Some were on the frontline of building AI into the company’s products,There were those who had worked there for more than a decade,Others were on leave when they found out they were without a job,Guardian Australia spoke to four former Australian staff members: three who were laid off last week and one who left fearing cuts were coming,They say the redundancies came without warning.
It felt like a “lack of humanity”, Rubio says.He had woken up at 8am on that Thursday morning, and saw an email alerting him to his fate.He says his work laptop login was blocked just half an hour later.“It was just a hard stop … I didn’t really know what to do with myself during the day,” he says.“I have no idea when the severance package will actually come because that wasn’t really communicated.
I literally had to just start that process of looking for new roles as soon as I got the email.”In a note sent to staff that same morning, Atlassian co-founder Mike Cannon-Brookes said the company had to become more agile, invest further in AI, and finally break even.In 2021, Atlassian was worth US$77bn.It attracted top software talent, having adopted a “team anywhere” policy of remote work and hiring rapidly during the pandemic, before keeping work culture relaxed and flying staff in for team retreats.But investors began selling out of software companies.
The company’s worth slipped to US$53bn by early 2025, then halved in the subsequent year – and halved again in just two months.Today it is estimated to be worth about US$13bn (A$18bn).Despite generating billions in revenue from business subscriptions to workflow tools such as Trello, it hasn’t turned a profit in almost 10 years and investors fear businesses will use AI to make tools.Rebecca*, a designer, says the fall in share price sparked rumours of redundancies, which only grew after Amazon, Block, Salesforce and Pinterest cut their workforce and promised to take on more AI.Atlassian also started bringing in AI “teammates” so staff could do more, she says.
Then, in February, hiring was paused.The company closed a number of offices soon after, citing underutilisation.Team retreats, where staff were flown in from around the country to enjoy some “togetherness”, were postponed.Rebecca thought her team would be left alone.They were at the frontline of adding AI to Atlassian’s products and were using the technology themselves to work faster.
“We thought that we were safe,” she says,“These AI agents have been really, really helpful, and they will be still for people, but you couldn’t use something like that to replace an actual human worker,”But the redundancies came,Most were in key software areas of research and development: engineering, products, design, all areas adopting AI tools,Rebecca says she believes little regard was paid to success, or an individuals’ abilities or life situation.
“I’m really stuck, and I don’t think this was handled very well, looking at many of our circumstances,” she says.“They definitely made a mistake by firing so many people who [are] eager to put their best effort into improving and building new features and functions within AI.”Staff have heard stories of those being let go while on parental leave, just weeks away from returning to work.Others had to spend the morning comforting crying children, worried they would have to move.Cannon-Brookes told staff that the affected roles were carefully considered.
“We took a thoughtful and incredibly thorough approach to determining impacted roles … and focused on retaining Atlassians with the skills to help us thrive as an AI-first company,” Cannon-Brookes wrote in his note.“Our approach is not ‘AI replaces people’.”Those affected found out through a sudden email and a video from Cannon-Brookes, and then were given some time to say goodbye to colleagues over company Slack messaging channels.Rebecca didn’t even get to watch that video.She says she was locked out of her staff account just an hour after being notified of the layoffs.
“I was not able to use it for long, I just looked at it for like five minutes,” Rebecca says.“I can’t access Slack and I can’t access anything from Atlassian … and I can’t talk to anyone about my situation.”Atlassian was once famous for its laid-back policies for staff.But Shaji*, an engineer who was laid off, says the environment worsened when the company started focusing on efficiency in 2024.At around that time, Atlassian updated its performance review system, putting employees everywhere under increased stress, Shaji says.
The new system, Apex, is aimed at recognising strong performers and rewarding them.Internal research suggested employee satisfaction improved, and developers began completing some tasks in half the time after it was introduced.“They were very open about the fact that they wanted to increase the number of ‘regrettable attrition’, which is basically people who are performance [managed] out … [and] it picked up significantly,” Shaji says.The company also began to encourage and train staff to use AI tools.By mid-2025, some were required to use it, Shaji says, although it’s understood the company has regarded its approach to AI as “thoughtful experimentation”.
“I was faster than AI, if it was a simple bug or vulnerability,” Shaji says,“But I started using more AI as the workload started increasing … I either have to start working 12 hours a day to complete this backload or tasks I got, or I need to start [automating] my work,”Cannon-Brookes told staff in his letter that the company had no choice but to pivot hard to AI,“The bar for what ‘great’ looks like for software companies – on growth, on profitability, on speed, on value creation – has gone up,” he wrote,“It would be disingenuous to pretend AI doesn’t change the mix of skills we need or the number of roles required in certain areas.
It does,”Rubio accuses the company of “AI-washing”,“There’s no amount of AI that can really replace a solid engineer,” he says,“You’re probably going to be shooting yourself in the foot at some later date when something happens and you have no idea how to fix it,”It’s understood Atlassian requires workers to be accountable for decisions – regardless of whether AI is used to inform them.
Shaji also says there’s a chance AI tools will improve and help his former colleagues make up for his lost expertise and work hours.“They’re making a big bet to say … you can fire people who hold all the institutional knowledge because it should be within their products,” he says.Dave* left the company in mid-2025, fearing that cuts would come.He was right.But he thinks Atlassian had little other option, as AI threatens to transform the software industry.
“Some of this, it’s just business,” he says.“So many things that people want to do can be automated, that’s just reality.”*Names have been changed to protect privacy.
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